PMI rebounds to 52.8% in May

Stronger economy, better West Coast product movement hailed as reasons for continuing growth.


The Institute for Supply Management's Purchasing Managers' Index (PMI) for May climbed 1.3 percentage points to 52.8% as industry experts saw signs of strengthening in the manufacturing sector. Courtesy: Institute for Supply Management

The Institute for Supply Management's (ISM) Purchasing Managers' Index (PMI) for May climbed 1.3 percentage points to 52.8% as industry experts saw signs of strengthening in the manufacturing sector. It is the first time the index has shown positive growth since October 2014.

The index had fallen to a 12-month low of 51.5% in both March and April, but members of the ISM's Manufacturing Business Survey Committee saw a stronger overall economy emerging in May. 

"Comments from the panel carry a positive tone in terms of an improving economy, increasing demand, and improving flow of goods through the West Coast ports," said committee chairman Bradley Holcomb. "Also noted, however, are continuing concerns over the price of the U.S. dollar and challenges affecting markets related to oil and gas industries."

All the indices supporting the PMI were up significantly in May. The New Orders Index rose 2.3 percentage points to 55.8%, the Production Index climbed 1.5 percentage points to 54.5% and the Employment Index climbed back above the 50% growth barrier, rising 3.4 percentage points to 51.7%.

Committee members expressed concern over the strong U.S. dollar and its impact on global trade. Among the comments:

  • "Economy is showing signs of improvement." (Food, Beverage & Tobacco Products) 
  • "Automotive is still strong. However, steel prices have dropped due to overcapacity and the strong U.S. dollar." (Fabricated Metal Products)
  • "Overall business is steady. Employment in this area is up, a good sign." (Transportation Equipment)
  • "The exchange rate on the dollar is hurting our sales in Asia. The conversion rate is lowering our profit in Europe where we sell in Euros." (Computer & Electronic Products)
  • "Continued challenges in markets related to oil and gas industries." (Miscellaneous Manufacturing)
  • "Oversupply is continuing to tighten profit margins." (Wood Products)
  • "West Coast port issues have eased up and our incoming imports are flowing again." (Machinery)

The PMI reached a milestone in May as well. The Index marked six consecutive years above the economic growth level of 43.1%. The overall manufacturing sector growth level of 50% was reached for the 29th straight month.

The Top Plant program honors outstanding manufacturing facilities in North America. View the 2015 Top Plant.
The Product of the Year program recognizes products newly released in the manufacturing industries.
Each year, a panel of Control Engineering and Plant Engineering editors and industry expert judges select the System Integrator of the Year Award winners in three categories.
Doubling down on digital manufacturing; Data driving predictive maintenance; Electric motors and generators; Rewarding operational improvement
2017 Lubrication Guide; Software tools; Microgrids and energy strategies; Use robots effectively
Prescriptive maintenance; Hannover Messe 2017 recap; Reduce welding errors
The cloud, mobility, and remote operations; SCADA and contextual mobility; Custom UPS empowering a secure pipeline
Infrastructure for natural gas expansion; Artificial lift methods; Disruptive technology and fugitive gas emissions
Mobility as the means to offshore innovation; Preventing another Deepwater Horizon; ROVs as subsea robots; SCADA and the radio spectrum
Research team developing Tesla coil designs; Implementing wireless process sensing
Commissioning electrical systems; Designing emergency and standby generator systems; Paralleling switchgear generator systems
Natural gas engines; New applications for fuel cells; Large engines become more efficient; Extending boiler life

Annual Salary Survey

Before the calendar turned, 2016 already had the makings of a pivotal year for manufacturing, and for the world.

There were the big events for the year, including the United States as Partner Country at Hannover Messe in April and the 2016 International Manufacturing Technology Show in Chicago in September. There's also the matter of the U.S. presidential elections in November, which promise to shape policy in manufacturing for years to come.

But the year started with global economic turmoil, as a slowdown in Chinese manufacturing triggered a worldwide stock hiccup that sent values plummeting. The continued plunge in world oil prices has resulted in a slowdown in exploration and, by extension, the manufacture of exploration equipment.

Read more: 2015 Salary Survey

Maintenance and reliability tips and best practices from the maintenance and reliability coaches at Allied Reliability Group.
The One Voice for Manufacturing blog reports on federal public policy issues impacting the manufacturing sector. One Voice is a joint effort by the National Tooling and Machining...
The Society for Maintenance and Reliability Professionals an organization devoted...
Join this ongoing discussion of machine guarding topics, including solutions assessments, regulatory compliance, gap analysis...
IMS Research, recently acquired by IHS Inc., is a leading independent supplier of market research and consultancy to the global electronics industry.
Maintenance is not optional in manufacturing. It’s a profit center, driving productivity and uptime while reducing overall repair costs.
The Lachance on CMMS blog is about current maintenance topics. Blogger Paul Lachance is president and chief technology officer for Smartware Group.
The maintenance journey has been a long, slow trek for most manufacturers and has gone from preventive maintenance to predictive maintenance.
Featured articles highlight technologies that enable the Industrial Internet of Things, IIoT-related products and strategies to get data more easily to the user.
This digital report will explore several aspects of how IIoT will transform manufacturing in the coming years.
Maintenance Manager; California Oils Corp.
Associate, Electrical Engineering; Wood Harbinger
Control Systems Engineer; Robert Bosch Corp.
This course focuses on climate analysis, appropriateness of cooling system selection, and combining cooling systems.
This course will help identify and reveal electrical hazards and identify the solutions to implementing and maintaining a safe work environment.
This course explains how maintaining power and communication systems through emergency power-generation systems is critical.
click me